Ryan Knudson

One trader that I talked to that primarily trades zero-date options told me, I can turn

$500 or $600 into $50,000 or $60,000 if I make the perfect trade.

Right, exactly.

But of course, the converse of that is that you have the potential for huge losses as well.

And because of the high risk involved, it requires this kind of perfect timing of the market.

And it does open.

It is one of the highest risk trades out there to engage in.

So these are platforms where traders can buy futures contracts tied to the outcome of events happening in the future.

Exactly, exactly.

So elections, like the Federal Reserve meeting, you can basically put money down on the outcome of these future events that they pay off if your prediction is accurate.

And the type of contract that has made quite a splash is sports.

So these prediction markets are available for sports games and entertainment events.

So not only can you bet on or hedge your portfolio against who's going to win the election, for example, but you can also bet on the winner of, you know, the Monday night football game.

Right, right.

That's essentially the question that critics are asking.

These things function like futures contracts, but on their face, they really resemble just plain sports gambling.

Exactly.

So Robinhood is not necessarily new to this criticism of blurring the lines between proper investing, quote unquote, and outright gambling.

But this really raised eyebrows because it seemed to blur those lines in a newer and bolder way than ever before.

So I think it's worth noting that there is a conflating of investing in entertainment that seems to be happening there, that especially when we're talking about the events in the presentation is very intentional on Vlad's part.